How To Get A Good Deal On A Good Contractor

Chances are, each and every one of us will have to do business with a contractor at least once in our lifetime. Whether you just need the plumbing redone or are renovating the entire house; whether you’re dabbling in real estate investment for the first time or are just doing a little home improvement to improve value, you’ll want to make sure you get the most for your money.

If you’re new to this world and are in need of guidance, here are the steps you should take to find a quality contractor, at the best possible rate, while still protecting yourself, your investment, and your property.

Shop Around

Unless you’ve already worked with someone you know and trust, you’ll likely have to delve into a world that you know little about the first time you need to hire a general contractor. The best thing you can do to start off the process is research, research, research. Look up local contractors in more than one medium: google, the phone book, and classified websites.

If they have a website, take a look at some of their projects, and keep in mind that not every quality contractor will have a top-of-the-line website, even this day in age. Many prefer to see the property, show off their previous work, and discuss options and costs in person.

The best way to find a quality contractor is to pay attention to reviews and testimonials. When you take to the web, consider what people are saying about them online heavily, but don’t take it as the final word. You can also ask friends or family members if they have any recommendations they can give based on experience. In this industry, the internet definitely helps, but it is not the end-all-be-all way to find the best contractor.

Once you’ve done your research, you should be able to narrow it down to a few options that you’d like to work with. Now it’s time to move on to the next step…

Interview

You’ve done your research to find some great options, but you’re about to make a huge investment that requires a lot of trust, so one of the most important steps to finding the right contractor is to meet with any potential candidate. The interview process should include an in-person inspection of the property that needs work before a bid is made, and somewhere in there you’ll want to barrage them with a slew of questions.

What questions should you ask?

First off, you want to make sure that everyone you interview is bidding on the exact same job. According to Real Estate Investor Josh Cantwell, it’s very important to get a detailed budget, schedule, and scope of work from your potential contractors all written down on paper. This serves two main purposes: to make sure there are no misunderstandings about the work to be done or the budget allotted, and to give you something on paper that you can show to the other contractors you interview, which will come in handy during the next step.

You’ll also want to ask them to see examples of their previous work. Any experienced contractor will have before-and-afters they can show you, and if they have some that portray a job similar to what you need, even better. Don’t be shy: ask them how much each project cost and how much time it took. Don’t be afraid to verify these claims. You can ask them for references and maybe even a chance to see a project they are currently working on.

You’ll also want to ask who is responsible for picking up and paying for materials. Is this something you are responsible for, or do they handle it? If they do, ask how they handle their billing and invoicing to make sure that all of their expenses are clearly documented. You’ll also want to ask about their payment schedule (do they want to be paid weekly, monthly, or in draws?) and how much they require up front. As a general rule, never pay more than one third of the total bid up front.

What kind of insurance do you have? Does their general liability cover theft and damage to their tools and supplies, or your personal possessions as well? Do they carry auto insurance and workman’s comp to cover their employees?

How much are you insured for? This question is very important, as you’ll want to make sure their insurance can cover the full amount of any mishaps, and not just partial.

When do your policies expire? It’s a good idea to check that your contractor’s insurance is current, and that none of their policies will expire throughout the process of the project.

Can I see proof? Your contractor should be able to provide you proof of insurance throughout all stages of work.

Can you add me to your policy? You may not always get a yes on this, but if you do it comes with many benefits. Being a named insured on each of your contractor’s policies will give you the same coverage the contractor would receive for any potential claim, and it also keeps them from changing to a less inferior policy or cancelling it outright without your knowledge. You will also be notified if they fail to pay their premiums, and you will be mailed a proof of insurance as well.

Negotiate

Once you’ve had all of your questions answered, the next step is negotiation. Negotiating can be tough, especially for those that are not comfortable with confrontation. However, home improvement contractors are one of the industries where negotiation is completely acceptable, and it won’t be a surprise if you try.

Even if you’ve made a hardlined decision as to which contractor you’re going with, it’s a good idea to keep them in the dark on this and let them know that you are considering others for the job. Once you have a fleshed-out bid, you have a few options: you could simply ask if they will lower the cost, or you can try the “value engineer” or “sweat equity” methods.

When asking them to value engineer your bid, state that your budget is a little lower and ask if there are any changes they can make to get it down to your goal, or if they have any advice on ways this can be done. When you offer sweat equity, you are basically asking if they can knock off some of the cost in exchange for work done on your part.

Negotiating doesn’t always go as planned. It might not lower the cost to your original goal, but it should help lower it at least some. Either way, it never hurts to ask, and it should be a respectful and professional process. Keep your ear out for these five things you never want to hear in your negotiations, and if they do come out, you might want to set your sights elsewhere.

Keep In Touch

Now that you’ve settled on a bid and a contract that works for you, it’s time to sign those papers. But don’t let the process stop there. You put a lot of work into finding the best deal on a good contractor, so keep in touch with them regularly throughout the job to make sure that everything is coming along well, and to take a proactive stance on any issues that might arise.

Keep in mind that it’s rare for jobs to be finished on time, and the it’s common for a contractor to be too busy to start work immediately (if they’re busy, that’s a good sign.)

Lastly, don’t finish paying everything off until the job is 100% complete, and if the end result is way too far off of the estimate, or if financial changes were made without notification or consent, do not hesitate to ask for a detailed and itemized statement. Some people have lost their mortgages or even had to file bankruptcy because of bad contractor deals, so this is of the utmost importance.